Rio Grande do Sul state restarts water utility privatization

Bnamericas Published: Thursday, September 01, 2022
Rio Grande do Sul state restarts water utility privatization

Brazil’s Rio Grande do Sul state has restarted the process to privatize water utility Corsan.

The company said in a statement that it opened a virtual data room for investors to access details about the process. 

Earlier this year the government tried to privatize Corsan via an IPO, with the state planning to keep a minority stake in the firm. However, it suspended the plans after the state audit court demanded corrections to the economic and financial modeling.

In a recent interview with BNamericas, Artur Lemos Júnior, Rio Grande do Sul’s chief of staff, said that the intention is now to sell full control of the utility. 

A potential threat to the privatization process is October’s general elections, but the most recent polls show that governor Eduardo Leite is likely to win reelection.

State officials see the privatization as a way to boost Corsan’s investment capacity.

Rio de Janeiro IPO 

Rio de Janeiro state governor Cláudio Castro, who is also expected to be reelected, unveiled plans for an IPO of state water utility Cedae

If reelected, Castro said in a local media interview that he would press ahead with the IPO in 2023 with the aim to raise 10bn reais (US$1.92bn). 

The governor did not say how much he plans to sell of the company.

Rio de Janeiro held two auctions for the concession of sewage collection and treatment services earlier this year, making Cedae only responsible for the collection and treatment of water distributed by the concessionaires.

State governments have been increasingly turning to privatizations and concessions for their water utilities after congress approved a new framework in 2020 that force all states and municipalities to provide full water and sewage coverage for all their inhabitants by 2033.

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